Elizabeth Warren's Climate Risk Disclosure Act Tries to Do What the SEC Didn't
The Green New Deal has been the focal point of the climate debate among the Democratic presidential candidates. Less publicized is the Climate Risk Disclosure Act, a proposal from Senator and presidential contender Elizabeth Warren, that seeks to frame climate change as a threat to the public markets.
The idea: force companies to publicly disclose how their valuation would fare should climate change continue versus how they would do should temperature rise be capped at 1.5 degrees Celsius higher than pre-industrial levels, the benchmark outlined in the Paris agreement.
"The Climate Risk Disclosure Act empowers investors to make smart decisions about where to invest their money by requiring that public companies be straight about how climate change and related policies will affect their bottom lines," said Sen. Warren in an exclusive statement sent to Cheddar. "Shareholders weighing this new information will compel big companies to speed up the transition to a clean energy economy, reducing the odds of an environmental and financial disaster without spending a dime of taxpayer money."
First proposed in 2018, and reintroduced with changes earlier this summer, Warren's bill would use the Securities and Exchange Commission to force publicly-traded companies to confront their own position within the climate crisis — and share that information with investors. The law, the Senator's office explains, would also have companies reveal their direct and indirect greenhouse gas emissions, share the total fossil fuel assets they own or manage, and outline their climate change risk management strategies.
It's certainly not the only climate proposal from the Massachusetts senator, but the Climate Risk Disclosure Act does appear fundamentally Warren-esque in its hope to use regulatory agencies — in this case, the SEC — to push the free market toward a less environmentally-destructive future.
Notably, the legislation was co-sponsored by several other presidential hopefuls, including Sen. Kamala Harris, Sen. Cory Booker, and Sen. Amy Klobuchar. It has also won the endorsement of sustainability advocacy organizations, including the Coalition for Environmentally Responsible Economies (Ceres) and the U.S. Forum for Sustainable and Responsible Investment (US SIF).
Rep. Sean Casten (D-Ill.) introduced the bill in the House, where it just passed the House Financial Services Committee.
"Public corporations must take responsibility for the large financial risks posed by the impacts of climate change, while embracing the economic opportunity of being global leaders in developing a clean energy economy," said Casten in a statement to Cheddar. "Our bill utilizes market mechanisms to incentivize climate action by ensuring that corporations disclose the risks posed by climate action to the benefit of their shareholders and the public."
This is not the first time an idea like this has come up. As early as 2007, state officials, investor advocates, and climate groups — including Ceres, Friends of the Earth, and Environmental Defense — had begun pushing the SEC to issue guidance as to how companies should disclose risks related to climate change.
"Companies' financial condition increasingly depends upon their ability to avoid climate risk and to capitalize on new business opportunities by responding to the changing physical and regulatory environment," they wrote in a letter to the agency. For instance, the organizations argued the physical impact of climate change could impact a company's ability to operate or expose it to new legal proceedings.
Three years later, the agency commissioners — in [a party-line vote] — finally issued guidance suggesting how companies might go about disclosing the risks related to the impact of climate change. The guidance noted that climate change could impact how a business described itself, its legal proceedings, managements' discussion and analysis of operations, and risk factors facing the company.
"It did not change any of its rules. It just said our current rules mandate addressing the risks of climate change," explains Alan Palmiter, a business law professor at Wake Forest University.
Palmiter has written that, at first, the SEC's guidance drew a good amount of attention. He found that a "flurry" of law firms sent letters to their clients notifying them of the new guidance, with many noting that the SEC could take further action on the subject.
However, Palmiter found that some law firms were unsure how to follow the guidance. Some also questioned the capacity of companies to determine how climate change might affect them, and some doubted the existence of climate change altogether, he found.
But despite some initial fanfare, the guidance didn't seem to have much impact on how many — or how much — companies disclosed about their climate risks. Palmiter notes that "during the first years after the SEC guidance, fewer than three-fifths of companies in the S&P 500 mentioned climate change in their 10-K annual reports" and that most of these were simply "a short one-paragraph risk factor."
In 2014, Ceres argued the SEC had not prioritized "the financial risks and opportunities of climate change as an important disclosure issue." The non-profit noted that the agency comment letters related to the adequacy of climate change-related disclosures had dwindled from 38 in 2010 to none in 2013. Many companies had said nothing about climate change in their annual SEC filings, the organization found, and disclosures were highly variable, often revealing little detailed information.
Two years later, the SEC requested comment on a wide range of issues, including climate change, but there doesn't appear to have been any subsequent action under the Trump administration. Last year, the SEC also received a request for a petition for broader rulemaking governing "environmental, social, and governmental" disclosures.
When asked about its guidance for companies in regard to climate change, the SEC directed Cheddar to the 2010 guidance. The agency did not respond to follow-up questions as to whether further guidance had been issued since then and why enforcement appears to have slowed.
The Government Accountability Office's February 2018 review of the guidance found that the SEC was limited because it "primarily relies on information that companies provide," couldn't subpoena more information, and the information it did have wasn't standardized across companies. It also reported that industry associations said "they consider the current climate-related disclosure requirements adequate and no additional climate-related disclosures are needed," but that "some investor groups and asset management firms have highlighted the need for companies to disclose more climate-related information." Echoing the GAO, Jim Hempstead, a managing director at Moody's told Politico this June, "Climate disclosures that are coming out right now are all over the map," and implying that disclosures "comparable across companies" would be more helpful.
Warren re-introduced the legislation this summer, saying it would "give investors, and the American public, the power to hold corporations accountable for their role in the climate crisis."
The failure of the 2010 guidance has been at the foundation to push this bill ahead, with the leaders of both Ceres and US SIF, citing the SEC's "lax" enforcement in their support for Warren's 2019 Climate Risk Disclosure Act.
Whether the bill will be passed or not, like so much of a growing slate of bills meant to combat the climate crisis, may rest on the ability of Democrats to win back the Senate and the White House in the upcoming election.
And while it's not likely to be signed into law yet, Bryan McGannon, director of government relations at US SIF, notes: "It builds a track record."
This story originally appeared in Cheddar. It is republished here as part of EcoWatch's partnership with Covering Climate Now, a global collaboration of more than 250 news outlets to strengthen coverage of the climate story.
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By Arkilaus Kladit
My name is Arkilaus Kladit. I'm from the Knasaimos-Tehit tribe in South Sorong Regency, West Papua Province, Indonesia. For decades my tribe has been fighting to protect our forests from outsiders who want to log it or clear it for palm oil. For my people, the forest is our mother and our best friend. Everything we need to survive comes from the forest: food, medicines, building materials, and there are many sacred sites in the forest.
Map of the Knasaimos traditional lands.
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By Farah Aqel
Overthinkers are people who are buried in their own obsessive thoughts. Imagine being in a large maze where each turn leads into an even deeper and knottier tangle of catastrophic, distressing events — that is what it feels like to them when they think about the issues that confront them.
Ruminating<p>According to the late Susan Nolen-Hoeksema, a professor of psychology at Yale University, <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5796420/" target="_blank">ruminating</a> involves replaying a problem over and over in your mind. We ruminate by obsessing over our thoughts and thinking repetitively about various aspects of a past situation.</p><p>It usually involves regret, self-loathing and self-blaming. Rumination is associated with the development of depression, anxiety and eating disorders. </p><p>People prone to such patterns of thought may, for example, overanalyze every single detail of a relationship that breaks up. They often blame themselves for what has happened and are overcome with regret, with typical thoughts being: </p><p>- I should have been more patient and more supportive. </p><p>- I have lost the most perfect partner ever. </p><p>- No one will love me again.</p>
Worrying<p>Worrying is wanting to predict the future. It involves negative thoughts about things that might and might not happen.</p><p>- They'll not like me in the interview; they'll not give me the job. </p><p>- I haven't heard back from other employers. How long will I be unemployed?</p><p>These thoughts are energy-draining and distressing. They could happen to anyone under stress. But when you reach the point where your thoughts and worrying are preventing you from doing what you want to do — from living your life to the fullest — then you should take action.</p>
Catch Yourself Overthinking<p>Reuben Berger, a psychotherapist at the university hospital in the western German city of Bonn, recommends several practical steps that you could employ in your daily routine when you catch yourself worrying or ruminating.</p><p>One effective remedy, says Berger, is the <a href="https://www.uofmhealth.org/health-library/uf9938" target="_blank">thought-stopping technique.</a></p><p>"When the negative thoughts come or ruminations start, you say to yourself: 'Stop!,'" he says, adding that it is more effective when you actually say the word out loud.</p><p>He even recommends having a rubber band around your wrist to ping against yourself while saying the word. Adding a visual component by imagining a stop sign also makes the technique more powerful, he says.</p><p>The main idea here is conditioning yourself to stop the loop of worrying (making future predictions) or rumination (obsessing over past events).</p><p>Berger says the technique could take up to two weeks to take effect and that it needs to be practiced every day. "Consistency is very important," he says. </p>
Thoughts Are Just Thoughts<p>Another way of dealing with negative thoughts often used in modern therapy is realizing that thoughts aren't facts, says Berger.</p><p>He says it is important when we think something to ask: Is that real? Did that really happen? What is the worst thing that could happen?</p><p>Flight anxiety is one example where untrue thoughts are accepted as facts. Although air travel is the safest way to get around, people suffering from fear of flying accept their thoughts and fears as reality, then act upon them by refusing to fly.</p>
Mindfulness<p>Berger also recommends the use of mindfulness techniques, in which attention is paid to experiences in the moment without judging them, as a way of reducing worrying.</p><p>"Mindfulness helps you to distance yourself from your thoughts and to be more present in the moment," he says.</p><p><a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3432145/#R2" target="_blank">Several studies</a> have shown that mindfulness has a positive impact on reducing stress-related behaviors such as rumination and worrying, as focusing on the moment makes anxiety about other problems impossible.</p><p>Mindfulness can be practiced during routine activities by paying attention to your body and your surroundings. For instance, when you leave for work in the morning, you can focus on sensing the breeze, listen attentively to birds, feel the gravel under your feet and monitor your breath. </p>
Trick Your Brain Into Happiness<p>People plagued by obsessive thoughts do not always choose healthy ways like mindfulness to distract from them, however.</p><p> Dr. Edward Selby, a psychologist at Florida state university, has shown in a study that people try to avoid rumination by engaging in a range of uncontrolled behaviors, such as binge eating and substance abuse.</p><p>But he says that a much better way to overcome such distress is by distraction and shifting attention away from problems that are obsessing us.</p><p>There are many activities that can be used to distract from rumination, he says, and people should choose the one that works best for them. Here are some examples:</p><p>- Listen to music</p><p>- Read a book</p><p>- Take a hot shower</p><p>- Dance or exercise </p><p>- Talk to a friend (not about the problem)</p><p>- Watch a movie</p><p>- Mindfulness meditation</p>
Changing the Perception of Events<p>The way people perceive a situation largely influences their emotions and behavior. It is not the situation itself that determines how they feel, but rather the way they interpret it.</p><p>Reframing negative thoughts can lead to positive emotions and, subsequently, healthier behaviors — including a reduction in damaging overthinking and worrying.</p><p>Cognitive behavioral therapy (CBT) is currently a gold standard in psychotherapy. CBT aims to change the way people think and act. It largely involves challenging unhelpful beliefs or attitudes such as overgeneralization — thinking "I always fail at public speaking" when you have had one bad experience in front of an audience, for example — or "catastrophization," i.e., imagining the worst possible outcome to a situation. </p><p>A psychotherapist can teach people how to implement such thought-changing techniques into their lives. Techniques vary depending on their issues and goals.</p>
Solutions Are at Hand<p>Try to find ways of avoiding worrying, rumination and overthinking that make you feel most comfortable.</p><p>Incorporating any routine in your life when you're stressed isn't an easy task, but you can do it! If you feel overwhelmed, you can always seek professional help. </p><p><em>If you are suffering from serious emotional strain or suicidal thoughts, do not hesitate to seek professional help. You can find information on where to find such help, no matter where you live in the world, <a href="https://www.befrienders.org/" target="_blank">at this website.</a></em></p>
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By Michael Baker, Amanda Kvalsvig and Nick Wilson
On Sunday, New Zealand marked 100 days without community transmission of COVID-19.
Deaths From COVID-19 Per Million Population<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzU0ODIyOS9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY0MjkzMDc1OX0.7Yp1h1hokihlMJUurDukGmq-Y8NJB0V-07O1ukEjGt0/img.png?width=980" id="0fe6a" class="rm-shortcode" data-rm-shortcode-id="6bce85a610aee18e2f4f1c1caca7b8a0" data-rm-shortcode-name="rebelmouse-image" />
<div id="77fff" class="rm-shortcode" data-rm-shortcode-id="ce7b34f8986d3d36bee5d4d83ac0822c"><blockquote class="twitter-tweet twitter-custom-tweet" data-twitter-tweet-id="1292270210238447616" data-partner="rebelmouse"><div style="margin:1em 0">COVID-19 Update There are no new cases of COVID-19 to report in New Zealand today. It has been 100 days since t… https://t.co/Cz55ixGZUz</div> — Unite against COVID-19 (@Unite against COVID-19)<a href="https://twitter.com/covid19nz/statuses/1292270210238447616">1596936201.0</a></blockquote></div>
Getting Through the Pandemic<p>We have gained a much better understanding of COVID-19 over the past eight months. Without effective control measures, it is likely to continue to spread globally for many months to years, ultimately infecting billions and killing millions. The proportion of infected people who die appears to be <a href="https://www.medrxiv.org/content/10.1101/2020.05.03.20089854v4" target="_blank">slightly below 1%</a>.</p><p>This infection also causes serious <a href="https://www.bmj.com/content/370/bmj.m2815" target="_blank">long-term consequences</a> for some survivors. The largest uncertainties involve <a href="https://www.nature.com/articles/d41586-020-02278-5" target="_blank">immunity to this virus</a>, whether it can develop from exposure to infection or vaccines, and if it is long-lasting. The potential for treatment with antivirals and other therapeutics is also still uncertain.</p><p>This knowledge reinforces the huge benefits of sustaining elimination. We know that if New Zealand were to experience widespread COVID-19 transmission, the <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3310086/" target="_blank">impact on Māori and Pasifika populations</a> could be catastrophic.</p><p>We have previously described critical measures to get us through this period, including the use of fabric face masks, improving contact tracing with suitable digital tools, applying a science-based approach to border management, and the need for a dedicated national public health agency.</p><p>Maintaining elimination depends on adopting a highly strategic approach to risk management. This approach involves choosing an optimal mix of interventions and using resources in the most efficient way to keep the risk of COVID-19 outbreaks at a consistently low level. Several measures can contribute to this goal over the next few months, while also allowing incremental increases in international travel:</p><ul><li>resurgence planning for a border-control failure and outbreaks of various sizes, with state-of-the-art contact tracing and an upgraded alert level system</li><li>ensuring all New Zealanders own a <a href="https://www.nzma.org.nz/journal-articles/mass-masking-an-alternative-to-a-second-lockdown-in-aotearoa" target="_blank">re-useable fabric face mask</a> with their <a href="https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12354409" target="_blank">use built into the alert level system</a></li><li>conducting exercises and simulations to test outbreak management procedures, possibly including "mass masking days" to engage the public in the response</li><li>carefully exploring processes to allow <a href="https://blogs.otago.ac.nz/pubhealthexpert/2020/06/16/preventing-outbreaks-of-covid-19-in-nz-associated-with-air-travel-from-australia-new-modelling-study-of-alternatives-to-quarantine/" target="_blank">quarantine-free travel</a> between jurisdictions free of COVID-19, notably various Pacific Islands, Tasmania and Taiwan (which may require digital tracking of arriving travellers for the first few weeks)</li><li>planning for carefully managed inbound travel by key long-term visitor groups such as tertiary students who would generally still need managed quarantine.</li></ul>
Building Back Better<p>New Zealand cannot change the reality of the global COVID-19 pandemic. But it can leverage possible benefits.</p><p>We should conduct an <a href="https://blogs.otago.ac.nz/pubhealthexpert/2020/06/11/five-key-reasons-why-nz-should-have-an-official-inquiry-into-the-response-to-the-covid-19-pandemic/" target="_blank">official inquiry into the COVID-19 response</a> so we learn everything we possibly can to improve our response capacity for future events.</p><p>We also need to establish a specialized national public health agency to <a href="https://blogs.otago.ac.nz/pubhealthexpert/2017/12/20/the-havelock-north-drinking-water-inquiry-a-wake-up-call-to-rebuild-public-health-in-new-zealand/" target="_blank">manage serious threats to public health</a> and provide critical mass to <a href="https://blogs.otago.ac.nz/pubhealthexpert/2020/02/05/a-preventable-measles-epidemic-lessons-for-reforming-public-health-in-nz/" target="_blank">advance public health generally</a>. Such an agency appears to have been a key factor in the success of Taiwan, which avoided a costly lockdown entirely.</p><p>Business as usual should not be an option for the recovery phase. A recent <a href="https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12353555" target="_blank">Massey University survey</a> suggests seven out of ten New Zealanders support a green recovery approach.</p><p>New Zealand's elimination of COVID-19 has drawn attention worldwide, with a description just <a href="https://www.nejm.org/doi/full/10.1056/NEJMc2025203" target="_blank">published</a> in the New England Journal of Medicine. We support a rejuvenated World Health Organization that can provide improved global leadership for pandemic prevention and control, including greater use of an elimination approach to combat COVID-19.</p>
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